H.R. 1786House116th Congress (2019-2021)In Committee

To amend the Internal Revenue Code of 1986 to repeal the limitation on the cover over of distilled spirits taxes to Puerto Rico and Virgin Islands and to transfer a portion of such cover over to the Puerto Rico Conservation Trust Fund.

AI-Generated Summary

Updated April 14, 2026 at 3:08 AM UTC

The bill changes the tax rules for distilled spirits imported into the United States from Puerto Rico and the Virgin Islands. It removes a previous cap that limited how much of the tax could be “covered over” (i.e., transferred) to the local treasuries, and it directs a portion of the rum tax to be sent to the Puerto Rico Conservation Trust Fund. The changes apply to spirits brought in after Dec. 31, 2018 and affect the U.S. Treasury, Puerto Rico’s treasury, and the Conservation Trust Fund.

Key Provisions

Repeals the limitation on the amount of distilled‑spirits tax that can be covered over to Puerto Rico and the Virgin Islands by deleting subsection (f) of §7652 and renumbering the remaining subsections.
Requires that, for rum taxes, $0.46 per proof gallon of the covered‑over amount be transferred to the Puerto Rico Conservation Trust Fund, treating that transfer as if it were covered over to Puerto Rico’s treasury.
Sets the effective date of both changes to apply to distilled spirits (including rum) imported after December 31, 2018.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

March 14, 2019

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HouseIntro Referral

Introduced in House

March 14, 2019

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

March 14, 2019

Bill Text

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Introduced in HouseIssued March 14, 2019

116th CONGRESS

1st Session

H. R. 1786

IN THE HOUSE OF REPRESENTATIVES

March 14, 2019

Miss González-Colón of Puerto Rico (for herself, Mr. Young, Ms. Velázquez, Mr. Duffy, Mr. Serrano, Mr. Bishop of Utah, Mr. Grijalva, Mr. Brendan F. Boyle of Pennsylvania, and Mr. Suozzi) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to repeal the limitation on the cover over of distilled spirits taxes to Puerto Rico and Virgin Islands and to transfer a portion of such cover over to the Puerto Rico Conservation Trust Fund.

Repeal of limitation on cover over of distilled spirits taxes to Puerto Rico and Virgin Islands

(a)

In general

Section 7652 of the Internal Revenue Code of 1986 is amended by striking subsection (f) and by redesignating subsections (g) and (h) as subsections (f) and (g), respectively.

(b)

Effective date

The amendments made by this section shall apply to distilled spirits brought into the United States after December 31, 2018.

Transfer to Puerto Rico Conservation Trust Fund of portion of Puerto Rico rum cover over

(a)

In general

Section 7652(e) of the Internal Revenue Code of 1986 is amended by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6), respectively, and by inserting after paragraph (2) the following new paragraph:

(2)

Transfer to Puerto Rico Conservation Trust Fund of portion of rum cover over

(A)

In general

From any amount otherwise required to be covered over to the treasury of Puerto Rico under this section with respect to taxes collected on rum under section 5001(a)(1) or subsection (a), the Secretary of the Treasury shall transfer to the Puerto Rico Conservation Trust Fund an amount equal to $0.46 per proof gallon of rum to which such cover over is attributable. Any amount transferred under the preceding sentence shall be treated for purposes of this section (other than this paragraph) as having been covered over to the treasury of Puerto Rico.

(B)

Puerto Rico Conservation Trust Fund

For purposes of this section, the term Puerto Rico Conservation Trust Fund means the fund established pursuant to a Memorandum of Understanding between the United States Department of the Interior and the Commonwealth of Puerto Rico, dated December 24, 1968.

(b)

Effective date

The amendments made by this section shall apply to rum brought into the United States after December 31, 2018.